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Reimer W. Leuth v. Joy H. Leuth

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION


July 7, 2011

REIMER W. LEUTH, PLAINTIFF-APPELLANT,
v.
JOY H. LEUTH, N/K/A JOY H.MORTENSON, DEFENDANT-RESPONDENT.

On appeal from the Superior Court of New Jersey, Chancery Division, Family Part, Monmouth County, Docket No. FM-13-886-96.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Submitted June 7, 2011

Before Judges Parrillo and Yannotti.

Plaintiff appeals from provisions of an order entered by the Family Part on September 10, 2010, denying his motion to terminate alimony and for an award of counsel fees and costs. We reverse in part, affirm in part, and remand the matter to the trial court for further proceedings on the motion to terminate alimony.

The parties were married on September 1, 1973. Three children were born of the marriage. A dual Final Judgment of Divorce dated July 29, 1997, dissolved the marriage. The judgment incorporated the parties' Property Settlement Agreement (PSA), which resolved numerous issues including equitable distribution, child support and alimony. Among other things, the PSA required plaintiff to pay defendant permanent alimony of $110 per week. The PSA also required plaintiff to maintain insurance on his life to ensure payment of child support and alimony.

At the time of the divorce, plaintiff was working for the United States Postal Service (USPS) and earning $47,000 per year. Defendant was cleaning houses and working part-time as a waitress. In his case information statement, plaintiff stated that defendant was earning $26,000 per year; however, defendant maintained that her earnings were $8400 per year.

On August 12, 2010, plaintiff filed a motion in the trial court to terminate his alimony and life insurance obligations, and for an award of counsel fees and costs. In support of his motion, plaintiff submitted a certification in which he stated that he was still working for the USPS and earned $49,000 in 2009. Plaintiff also stated that defendant obtained a job with a State administrative agency in 2000, and an internet search revealed that she earned $49,305 in 2010.

Plaintiff argued that the court should terminate his alimony obligation because defendant's earnings were comparable to his. Plaintiff additionally argued that his life insurance obligations should be terminated because the children were emancipated and defendant's earnings were sufficient to warrant termination of alimony. In addition, plaintiff asserted that the court should award him counsel fees and costs because defendant had rebuffed his attempts to revolve these issues without court intervention. Defendant did not file a response to the motion.

On September 10, 2010, the trial court filed a written decision, in which it concluded that plaintiff's motion for termination of his life insurance obligation to secure payment of child support should be granted but all of the other relief requested should be denied. The court found that the increase in defendant's earnings was not a significant change in her circumstances that warranted termination of alimony or the life insurance obligation related to those payments. The court entered an order dated September 10, 2010, memorializing its decision.

On appeal, plaintiff argues that the trial court erred by:

1) failing to terminate his alimony obligation based on a significant change in defendant's circumstances; 2) failing to grant his request for financial discovery; 3) erroneously interpreting the PSA; and 4) denying his motion for an award of counsel fees and costs.

We turn first to plaintiff's contention that the court should have ordered the termination of his alimony obligation. An alimony award is intended "to assist the supported spouse in achieving a lifestyle that is reasonably comparable" to the standard of living enjoyed during the marriage. Crews v. Crews, 164 N.J. 11, 16 (2000). Even when the parties have entered into an agreement that requires one party to pay permanent alimony to the other, the court retains the authority to review and modify such an agreement "based upon a showing of changed circumstances." Miller v. Miller, 160 N.J. 408, 419 (1999) (citing Lepis v. Lepis, 83 N.J. 139, 145 (1980)).

The party seeking modification of an agreement to pay alimony bears the burden of making a prima facie showing that the circumstances have changed. Id. at 420. If such a showing is made, the court may order the exchange of financial discovery and hold an evidentiary hearing to resolve disputed issues of fact material to the decision of whether the agreement should be modified. Ibid. (citing Lepis, supra, 83 N.J. at 157-59; Grotsky v. Grotsky, 39 N.J. 354, 356-57 (1971)).

"[T]he standard of living experienced during the marriage" is the "touchstone for the initial alimony award and for adjudicating later motions for modification of the alimony award when 'changed circumstances' are asserted." Crews, supra, 164 N.J. at 16. Changed circumstances may be shown not only by a significant reduction in the resources of the supporting spouse but also by a "'significant change'" for the better in the dependent spouse's circumstances. Glass v. Glass, 366 N.J. Super. 357, 371 (App. Div.) (quoting Stamberg v. Stamberg, 302 N.J. Super. 35, 42 (App. Div. 1997)), certif. denied, 180 N.J. 354 (2004).

Although the marital standard of living is the "touchstone" for considering an application for changed circumstances, "other considerations are similarly compelling." Id. at 372. An agreement between the parties "is entitled to significant consideration" because of our "'strong public policy favoring stability of consensual arrangements for support in matrimonial matters[.]'" Ibid. (quoting Avery v. Avery, 209 N.J. 155, 160 (App. Div. 1986)).

The court should consider whether the agreement to pay alimony "was but one component of a much broader agreement" which resolved "'a host of domestic issues'" that arose when the parties ended their marriage. Id. at 373-74 (quoting Conforti v. Guliadis, 128 N.J. 318, 323 (1992)). The court must determine whether, in light of the relevant considerations, modification of the agreement would be "'equitable and fair, giving due weight to the strong public policy favoring stability of arrangements.'" Rolnick v. Rolnick, 262 N.J. Super. 343, 353 (App. Div. 1993) (quoting Smith v. Smith, 72 N.J. 350, 360 (1977)).

We are convinced that plaintiff made a prima facie showing of changed circumstances in his motion to terminate alimony. When the parties entered into the PSA, plaintiff was earning $47,000. The court assumed for purposes of its decision that, at the time of his divorce, defendant was earning $8400 cleaning houses and working part-time as a waitress. In his certification, plaintiff stated that he earned $49,764.80 in 2008, and $48,739.29 in 2009. Plaintiff also established that, according to information available on the internet, defendant earned $44,963 in 2008, $47,612 in 2009 and $49,305 in 2010.

In our view, an increase in earnings from $8400 to $49,305 is prima facie evidence of a significant change for the better in defendant's circumstances. Glass, supra, 366 N.J. Super. at 371. Based on that evidence, the court should have ordered the parties to exchange financial discovery, and permitted the parties to submit additional evidence so that a determination could be made as to whether termination of plaintiff's alimony obligation was warranted based on an assessment of all relevant considerations.

We note that, in ruling on plaintiff's motion to terminate alimony, the trial court correctly considered plaintiff's obligation to pay defendant permanent alimony in the context of the parties' entire agreement. The court made various findings regarding the PSA, which the court believed supported its conclusion that the increase in defendant's earnings was not a significant change warranting termination of plaintiff's alimony obligation.

In its decision, the court stated that the PSA was an integrated agreement, which resolved various financial matters including equitable distribution, child support and alimony. The court wrote that the parties entered into the agreement with the understanding that in the future, defendant would continue to be employed and earn income that would supplement the support provided by plaintiff.

The court found that "defendant had waived her interest in plaintiff's pension plan in return for plaintiff's transfer of his interest in the former marital home." The court pointed out that defendant had assumed responsibility for the mortgage on the marital home and all "roof expenses." The court also stated that it "seemed apparent" that defendant's agreement to waive her interest in plaintiff's pension plan was a significant factor in the agreement.

Plaintiff argues that the court erroneously interpreted the PSA by finding that defendant gave up an interest in certain marital assets as a "trade-off" for plaintiff's agreement to pay her permanent alimony. Plaintiff asserts that the obligation to pay permanent alimony had nothing to do with other monetary issues resolved by the PSA, and the court should not have considered those other issues in determining whether alimony should be terminated.

The PSA provides some support for plaintiff's argument. The PSA states that the parties agreed that the average value of plaintiff's pension was $108,278. In addition, the PSA states that the marital home had been appraised at $113,142.50. The PSA also states that defendant waived her interest in the pension plan "in exchange for the transfer" of plaintiff's interest in the marital home.

The PSA additionally states that the parties agreed plaintiff would be obligated for the $5900 that was due on a credit card account "because of adjustments of monies due" to defendant from plaintiff's pension plan. Furthermore, the PSA states that the parties agreed plaintiff would receive $773.68 and defendant would receive $1721.67 from anticipated federal and state tax refunds. The PSA states that this "unequal split" was due to "adjustments of monies dues from" the pension plan.

The PSA did not, however, state that plaintiff's agreement to pay alimony was in exchange for any compromise on the part of defendant with regard to a claim she might have to any particular marital asset. The PSA merely states that plaintiff would pay alimony in the amount of $110 per week, and plaintiff's alimony obligation would be terminated upon: 1) the death of either party; 2) defendant's remarriage; or 3) defendant's cohabitation with an unrelated male or "a significant other[.]" The PSA additionally stated that, upon his retirement, plaintiff could move for a reduction in alimony.

In our view, the terms of the PSA do not, standing alone, support the trial court's finding that plaintiff agreed to pay alimony of $110 per week as part of an overall compromise by defendant regarding the parties' marital assets and obligations. Rather, the terms of the PSA suggest that defendant waived her interest in plaintiff's pension plan in exchange for the transfer by plaintiff of his interest in the marital home, plaintiff's agreement to assume the outstanding credit card debt, and a greater share of the anticipated tax returns. Moreover, the PSA suggests that the parties intended that alimony would be paid to defendant because her earnings were insufficient to maintain the marital lifestyle while acting as primary caretaker for the children.

We do not, however, reach any final conclusions as to what the parties intended when they entered into the Agreement, or whether the agreement to pay permanent alimony was an essential term, without which the PSA can not be considered fair and equitable. We state only that such conclusions could not have been reached based solely on the terms of the PSA.

We note that evidence of the circumstances under which an integrated agreement was made is always admissible to aid in its interpretation. Porreca v. City of Millville, 419 N.J. Super. 212, 232 (App. Div. 2011). Such evidence assists the court in ascertaining "'the intention of the parties in the light not only of the language used but also of the surrounding circumstances and the objects sought to be attained by them under their agreement.'" Great Atl. & Pac. Tea Co. v. Checchio, 335 N.J. Super. 495, 501 (App. Div. 2000) (quoting Cozzi v. Owens Corning Fiber Glass Corp., 63 N.J. Super. 117, 121 (App. Div. 1960)).

We therefore conclude that plaintiff presented prima facie evidence of a change for the better in defendant's circumstances which warranted further review of plaintiff's application to terminate alimony. Accordingly, we reverse the provision of the court's order of September 10, 2O10, which denied plaintiff's motion to terminate alimony, and we remand the matter to the trial court for further proceedings.

On remand, the trial court should order the parties to exchange financial discovery, and allow the parties to submit further evidence regarding: (1) their intentions with regard to the provision of the PSA requiring plaintiff to pay alimony; (2) whether the agreement to pay alimony was part of an overall compromise by the parties regarding marital assets and obligations; and (3) whether the permanent alimony of $110 per week was an essential part of the agreement, without which the PSA cannot be considered fair and equitable. The trial court should conduct an evidentiary hearing to address any disputed material issues of fact.

Plaintiff additionally argues that the trial court erred by failing to award him counsel fees and costs. He contends that defendant acted unreasonably and in bad faith by failing to respond to his motion. He also contends that he has been put to needless expense in litigating this dispute.

We are convinced, however, that the court did not abuse its discretion by refusing to award plaintiff counsel fees and costs. Because plaintiff secured only limited relief, specifically the termination of his obligation to maintain life insurance to secure payment of child support, the court properly refused to award him counsel fees and costs. Moreover, plaintiff has not yet established that he is entitled to an order terminating his alimony obligation. Plaintiff may renew his motion for counsel fees and costs on remand.

Reversed in part, affirmed in part, and remanded to the trial court for further proceedings in conformity with this opinion. We do not retain jurisdiction.

20110707

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